You are encouraged to acquire the aforementioned documents and to familiarize yourself with their contents.

Should there be any discrepancy between what is contained in this document and what is contained in the Canada Transportation Act and the Air Transportation Regulations the act and the regulations shall prevail.

B. Definitions

In this document,

"Air service"

means a service, provided by means of an aircraft, that is publicly available for the transportation of passengers or goods, or both.

"All-cargo aircraft"

means an aircraft that is equipped for the carriage of goods only.

"Canadian aviation document"

pursuant to the Aeronautics Act, means any licence, permit accreditation, certificate or other document issued by the Minister under Part I to or with respect to any person or in respect of any aeronautical product, aerodrome, facility or service (in this guide, the term "Air Operator Certificate" is used with respect to a Canadian aviation document);

"Certificated Maximum Carrying Capacity" means

the maximum number of passengers specified in the Type Approval Data Sheet or the Type Certificate Data Sheet issued or accepted by the competent Canadian authority for the aircraft type and model, or

in respect of a particular aircraft that has been modified to allow a higher number of passengers, the maximum number of passengers specified in the Supplemental Type Approval or the Supplemental Type Certificate issued or accepted by the competent Canadian authority;

"Domestic service"

means an air service between points in Canada, from and to the same point in Canada or between Canada and a point outside Canada that is not in the territory of another country (section 55 of the Act);

"Large aircraft"

means an aircraft equipped for the carriage of passengers and having a certificated maximum carrying capacity of more than 89 passengers.

"MCTOW"

means the maximum certificated take-off weight for aircraft as shown in the aircraft flight manual referred to in the aircraft's Certificate of Airworthiness issued by the competent Canadian or foreign authority.

"Medium aircraft"

means an aircraft equipped for the carriage of passengers and having a certificated maximum carrying capacity of more than 39 but not more than 89 passengers.

"Passenger seat"

for insurance purposes, means a seat on board an aircraft that may be permanently occupied by a passenger for the period during which the aircraft is being used for a domestic service or an international service.

"Small aircraft"

means an aircraft equipped for the carriage of passengers and having a certificated maximum carrying capacity of not more than 39 passengers.

C. Air Services Excluded From Licensing Requirements

You do not require an Agency licence to operate the following specialty services to which Part II of the Act ("Air Transportation") does not apply, however, you will continue to be required to obtain an Air Operator Certificate and to satisfy Transport Canada concerning insurance coverage:

aerial advertising services

aerial fire-fighting services

aerial sightseeing services

aerial survey services

aerial weather altering services

air cushion vehicle services

glider towing services

external helitransport services

parachute jumping services

transportation services for the retrieval of human organs for human transplants

aircraft demonstration services

aerial reconnaissance services

hot air balloon services

rocket launching

aerial spreading services

air flight training services

aerial inspection services

aerial construction services

aerial photography services

aerial forest fire management services; and

aerial spraying services

D. Classification of Aircraft

The following classes of aircraft have been established in the ATR (section 4 refers):

small aircraft (being an aircraft equipped for the carriage of passengers and having a certificated maximum carrying capacity of not more than 39 passengers)

medium aircraft (being an aircraft equipped for the carriage of passengers and having a certificated maximum carrying capacity of more than 39 but not more than 89 passengers)

large aircraft (being an aircraft equipped for the carriage of passengers and having a certificated maximum carrying capacity of more than 89 passengers)

all-cargo aircraft (being an aircraft that is equipped for the carriage of goods only)

The passenger aircraft classification is based on the certificated maximum carrying capacity of the aircraft (see definition in item B of Part I of this guide) as opposed to the actual configuration of the aircraft. For example, although the Dash 8-100 aircraft is usually configured with less than 40 passenger seats, it is currently considered to be a medium passenger aircraft given it has a certificated maximum carrying capacity of 40 passengers, which is within the threshold of the medium aircraft category.

E. Classification of Domestic Air Services

The following classes of domestic air services have been established in the ATR (section 5 refers):

Domestic service, small aircraft;

Domestic service, medium aircraft;

Domestic service, large aircraft; and

Domestic service, all-cargo aircraft.

F. Requirements for Licence Issuance

A licence to operate a domestic service will be issued by the Agency if it is satisfied that you:

a. are Canadian, or that you have been exempted from this requirement by the Minister, pursuant to section 62 of the Act;

Canadian applicants must submit evidence of being Canadian as defined in section 55 of the act with the Agency at the same time that the information required to be filed pursuant to Appendix 1 of this guide is to be submitted. Documentary requirements to demonstrate "Canadian" status are described in Appendix 3 of this guide.

b. hold an Air Operator Certificate issued by Transport Canada in respect of the service to be provided under the licence;

A Canadian aviation document issued by Transport Canada is a prerequisite for licence issuance. A copy of the Canadian aviation document valid for the proposed service must be submitted to the Agency before an agency licence can be issued

c. have submitted a certificate of insurance evidencing that you have the prescribed liability insurance coverage in respect of the service to be provided under the licence.

d. meet prescribed financial requirements where applicable; and

e. within the preceding twelve months, have not contravened section 59 of the Act to the effect that no person has sold, caused to be sold or publicly offered for sale in Canada transportation in respect of the applied for air service without holding the required licence.

G. Insurance Requirements

The insurance requirements are set out in sections 7 and 8 of the ATR. For reference purposes, sections 7 and 8 are set out below:

SECTION 7

7.(1) No air carrier shall operate a domestic service or an international service unless, for every accident or incident related to the operation of that service, it has:

liability insurance covering risks of injury to or death of passengers in an amount that is not less than the amount determined by multiplying $300,000 by the number of passenger seats on board the aircraft engaged in the service; and

insurance covering risks of public liability in an amount that is not less than

$1,000,000, where the MCTOW of the aircraft engaged in the service is not greater than 7,500 pounds,

$2,000,000, where the MCTOW of the aircraft engaged in the service is greater than 7,500 pounds but not greater than 18,000 pounds, and

where the MCTOW of the aircraft engaged in the service is greater than 18,000 pounds, $2,000,000 plus an amount determined by multiplying $150 by the number of pounds by which the MCTOW of the aircraft exceeds 18,000 pounds.

7.(2) The insurance coverage required by paragraph (1)(a) need not extend to any passenger who is an employee of an air carrier if workers' compensation legislation governing a claim for damages against that air carrier by the employee is applicable.

7.(3) No air carrier shall take out liability insurance to comply with subsection (1) that contains an exclusion or waiver provision reducing insurance coverage for any accident or incident below the applicable minima determined pursuant to that subsection, unless that provision

consists of standard exclusion clauses adopted by the international aviation insurance industry dealing with

war, hijacking and other perils,

noise and pollution and other perils, or

aviation radioactive contamination;

is in respect of chemical drift;

is to the effect that the insurance does not apply to liability assumed by the air carrier under any contract or agreement unless such liability would have attached to the air carrier even in the absence of such contract or agreement; or

is to the effect that the entire policy shall be void if the air carrier has concealed or misrepresented any material fact or circumstance concerning the insurance or the subject thereof or if there has been any fraud, attempted fraud or false statement by the air carrier touching any matter relating to the insurance or the subject thereof, whether before or after a loss.

7.(4) An air carrier may have a comprehensive single limit liability coverage where liability risks are covered by a single policy or a combination of primary and excess policies, but no single limit liability coverage of that air carrier shall be for an amount that is less than the applicable combined insurance minima determined pursuant to paragraphs (1)(a) and (b).

SECTION 8

8.(1) Every applicant for a licence or for an amendment to or renewal of a licence, and every licensee shall file with the Agency, in respect of the service to be provided or being provided, as the case may be, a valid certificate of insurance in the form set out in Schedule I.

8.(2) A person referred to in subsection (1) who files a certificate of insurance electronically shall, on the request of the Agency, file forthwith a certified true copy of the certificate.

Applicants requesting modifications to existing licence authorities are reminded that appropriate amendments to insurance certificates on file with the Agency will also be required. The requirements concerning certificates of insurance are closely monitored and strictly enforced by the Agency.

H. Financial Requirement Information

Persons Subject to Prescribed Financial Requirements

You are subject to prescribed financial requirements if :

you are a "Canadian" applicant; AND

you apply for the issuance or the reinstatement (if suspended for 60 days or more) of:

a domestic licence;

a non-scheduled international licence; or

a scheduled international licence

that authorizes the operation of an air service using medium or large aircraft.

HOWEVER, you are not subject to prescribed financial requirements if:

you apply for the issuance or the reinstatement of a licence to operate an air service using all-cargo aircraft;

you apply for the issuance or the reinstatement (as described above) of a licence to operate an air service using mediumaircraft AND you already operate an air service using medium or large aircraft pursuant to:

a non-scheduled international licence;

a scheduled international licence; or

a domestic licence for which you have met the financial requirements within the last 12 months; OR

you apply for the issuance or the reinstatement (as described above) of a licence to operate an air service using largeaircraft AND you already operate an air service using large aircraft pursuant to:

a non-scheduled international licence;

a scheduled international licence; or

a domestic licence for which you have met the financial requirements within the last 12 months.

If you are subject to prescribed financial requirements you should also provide the information and documentation requested in the "financial requirements guide". This guide is available upon request.

I. Prohibition Regarding Sale of an Air Service

Section 59 of the Act requires that no person shall sell, cause to be sold or publicly offer for sale in Canada an air service unless, where required under Part II of the Act, the person holds a licence issued under Part II in respect of that service.

NOTE

Where an individual has contravened section 59 of the Act, the Agency may, for a period not exceeding twelve months after the date of the contravention, refuse to issue a licence in respect of an air service to the individual or to any corporation of which the individual is a principal.

Where a corporation has contravened section 59, the Agency may, for a period not exceeding twelve months after the date of the contravention, refuse to issue a licence in respect of an air service to

the corporation;

any person who, as a principal of the corporation, directed, authorized, assented to, acquiesced in or participated in a contravention that gave rise to the suspension or cancellation; and

any body corporate of which the corporation or the person, referred to in paragraph (b) above, is a principal.

J. Licence Not Transferable

A licence for the operation of an air service is not transferable (section 58 of the Act refers).

K. Statistical Reporting Requirements

New applicants for licences to operate air services should be aware of the type and volume of publication/statistics that will be required and the frequency of reporting.

Detailed information and instructions with respect to reporting requirements may be obtained from:

L. Annual Licence Validation Requirement

Pursuant to section 10 of the ATR, every holder of a domestic licence is required to file with the Agency, within 30 days after each anniversary date of the licence, a declaration of continuance of qualifications as set out in Schedule II of the ATR. Schedule II is attached as Appendix 4.

PART II: APPLICATION INSTRUCTIONS

1. Format

Applications should be typewritten and titled and numbered as set out in the Appendices.

2. Language

Applications may be submitted in either English or French.

3. Filing Instructions

The Original application and two (2) copies thereof, including all supporting documentation, are to be submitted to the Agency (except only an Original and one (1) copy of Appendix 3 and Financial Requirement Information referred to in item H of Part I of this guide are required to be submitted). The application should be addressed as follows:

The onus is on the applicant to complete the application in full and to include all supporting documentation requested. Processing of an incomplete application or an application not filed in accordance with the instructions included with this guide may be delayed.

For your information, subsection 29(1) of the Act states:

"The Agency shall make its decision in any proceedings before it as expeditiously as possible, but no later than one hundred and twenty days after the originating documents are received, unless the parties agree to an extension or this Act or a regulation made under subsection (2) provides otherwise."

A proceeding includes an application submitted pursuant to this guideline. You are encouraged to file evidence of compliance with the requirements to be Canadian and the financial requirements, if such apply, as expeditiously as possible so that you can be given sufficient time to respond if matters need to be clarified following your submissions.

4. Signature

The original of an application should be identified as such and the Original, should be signed by:

the proprietor, if a proprietorship (i.e. an individual);

each partner, if a partnership; or

an officer or director of the corporation duly authorized to execute such documents under seal, if any, on behalf of the corporation, if a corporation.

A person such as a lawyer or consultant who prepares an application on behalf of an applicant cannot sign the application unless the person is a duly authorized agent or solicitor acting for the applicant.

5. Verification

All of the information contained in the application, including the supporting documentation and changes subsequently made thereto, must be verified by an affidavit of the applicant, attesting to its truth, accuracy and completeness. (A sample affidavit form, which may be used by applicants, is attached as Appendix 2)

A person such as a lawyer or consultant who prepares an application on behalf of an applicant cannot sign the affidavit.

6. Amendments

Any changes made to the application are considered to be amendments to the original application and are to be titled and numbered in the same fashion as the corresponding items in the original application.

7. Additional Information

The Agency may request additional information and documentation if it is required or if ambiguities need to be clarified.

Sensitive or Confidential information should be clearly marked as such and should be submitted as separate documents.